Developers should consider selling directly to players

A guest op-ed by Skelius Mortalis

Earlier on, video games couldn’t be sold without enlisting a publishing company. Now publishers are for the most part there to promote your game and offer upfront payments (and/or investments.) The catch? Those publishers take roughly 30-50% of the developer’s profits for that service. Now add on top the fact that these games are distributed on major platforms which take 30%, then the application of sales tax (appx. 20%), and depending on the country, the profit percentage for the developer can be in the single digits!

Today the Games industry is suffering overall from greedy publishers with a stranglehold on a handful of platforms. But that's changing — and fast: Epic is winning its lawsuits against Apple and is taking on Google to bring us alternative mobile stores with better pricing. The main outcome is that soon appstores will be all over the place. Mobile distribution and self-distribution will explode.

Devs now have a golden opportunity to sell directly to players, self-distribute games, and utilize alternative stores to avoid platform fees. Instead of 30% you could pay merely 3% for a Merchant of Record service. You can then accept payments from players directly. By avoiding publishers, you outsource your marketing to drive players to your own community space and webstore.

Take for example Path of Exile, or Genshin Impact. They took the tough and risky step of trailblazing in self-distribution. Based on their success, it's now more accessible and convenient for any game dev to consider. “But major platforms have the player numbers”, you might say. The truth is, those numbers are only to be expected for games placed in thousands of Wishlists recently, showing momentum, for without it – none of the players (in an already oversaturated market!) will ever see the game on their discovery queues and bundles.

Realistically, you don’t even need to leave the platforms: Epic Games Store supports self-distribution and third-party payment options. Similarly, Steam doesn’t have exclusivity, it freely allows you to self-distribute Steam Keys for your games. Or you could do one better and create your own community and platform just like Grinding Gear Games did with Path of Exile, approaching Steam just for the traffic. Steam doesn’t take their 30% from that!

I believe that any game focused on online-play should build a community first, and once it has that community, it takes just a few steps to monetize it, saving capital for developers to build a truly great game. Instead of signing with investors and publishers who would take control and steer it towards being a weaker and more dismal product, contributing to the decline of the overall scene.

My point is: I was in a few indie companies. Their main issue was that they existed to survive, instead of making a sustainable business. Be smart about it! Take power into your own hands, build communities, and make it work by teaming with a Merchant of Record provider. Especially for live service and bigger games. That frees you up so you can focus on what matters most — making great games!

- Skelius Mortalis

Skelius Mortalis is a professional Business Development Manager. You can reach him on LinkedIn @ https://www.linkedin.com/in/skelius/

Views expressed are author's own, which have GBAMFS' principle endorsement (Consistent With Mission: Player / Dev empowerment.) Not a paid placement.